U.S. top court backs Monsanto’s patent on genetically modified soybeans

In a case closely watched by the biotechnology industry, the U.S. Supreme Court unanimously ruled Monday that farmers may not use Monsanto’s patented genetically modified soybeans to sprout new seeds without paying the company a fee.

The highly-anticipated ruling could have implications for biotech companies in many sectors — including modern agriculture and businesses involving live vaccines and bacteria strains — for how patents are applied to their innovations and usage beyond the first generation.

Justice Elena Kagan, writing on behalf of the court, said Monday’s decision was intended to be “limited — addressing the situation before us, rather than everyone involving a self-replicating product.”

But biotech companies saw the ruling as a “reaffirmation” of the principle that a patent extends to copies made of a patented item, said Patricia Millett, a Washington lawyer who filed an amicus brief on behalf of the Biotechnology Industry Organization.

“It’s very important for the innovation economy,” she said.

The U.S. Supreme Court unanimously agreed with Monsanto that Indiana farmer Vernon Hugh Bowman had violated the patent law by using the company’s patented soybean seeds without seeking a license. It upheld a US$84,456 award won by the Missouri-based agriculture biotechnology company.

Instead of buying herbicide-resistant soybean seeds from an authorized dealer, in 1999 Mr. Bowman bought a mix of harvested soybean seeds from a grain-elevator hoping that some of them would have the desired herbicide-resistant technology. He then used those soybeans, with the patented Roundup Ready gene, to plant his crops and save some money in the process.

Mr. Bowman kept the seed generated from the successful crop and used it the following years until 2007.

“Bowman planted Monsanto’s patented soybeans solely to make and market replicas of them, thus depriving the company of the reward patent law provides for the sale of each article,” Justice Kagan wrote.

Mark Walters, the lawyer for the Indiana farmer said Monday’s ruling “makes infringers of the 95% of America’s soybean farmers” and said that small farmers may need to “organize and lobby Congress for a clarification of the law.”

In Canada, a similar case involving Monsanto and a Saskatchewan farmer went before the country’s highest court nearly 10 years ago.

The court ruled 5-4 that Monsanto held a valid patent on a gene inserted into canola plants to make them resistant to the company’s Roundup Ready herbicide. It ruled that Percy Schmeiser, a then 75-year-old farmer from Saskatchewan, infringed the patent by growing Roundup Ready seeds, and knowingly planting them.

The ruling was welcomed by Canadian biotechnology companies, who warned of a potential “chilling effect” if the Canada’s Patent Act was not upheld in the case.

Barry Senft, the chief executive of Grain Farmers of Ontario, said the rules regarding patents in Canadian agriculture are clear.

“The rules are pretty plain, that if you want to use that [seed] variety, then there is a cost to do that,” said Mr. Senft. “Farmers have a choice of not using that variety and using something that’s coming through a public program of some sort.”

While the U.S. Supreme Court ruling has no material effect on Canadian matters, it reinforces a positive environment for innovation in the sector, said Trish Jordan, Monsanto Canada spokesperson.

“Certainly, from the perspective of showing respect for intellectual property and encouraging companies, whether public or private, to invest in agriculture and to have some sort of assurance that the innovations and new technology that they potentially would bring to agriculture for the benefit of farmers would be protected,” she said. “In a general sense, that’s very good news. But in Canada, we already have that strong system here.”

— With files from Reuters, Bloomberg, the New York Times and the Canadian Press